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Ingrid Strauss, CFP®, Partner of Cordis Financial, was featured as a panelist for a breakout session focused on preparing for the wealth transfer to younger generations at Pershing INSITE's Conference in Orlando, FL on June 9th, 2016. Below is an interview conducted by North Star Resource Group with Strauss on topics surrounding financial advisors and connecting with Generations X and Y:

North Star: How do generations X and Y approach financial topics such as investing or retirement planning differently?

Ingrid Strauss: In our experience, our Gen X/Gen Y clients are much more conservative than our baby boomer clients. It makes sense if you think about it—these generations haven’t experienced a lot of stock market growth, their housing values haven’t tripled since they bought the house, etc. The one thing that has been drilled in their head is, “you’ve got to save for retirement as much as possible.” We have to push back a little sometimes and remind them of all the other goals they’ve indicated, such as funding their child’s college, purchasing the lake home in 15 years and so on. While maxing out the 401(k) is great, we need to make sure they’re adequately planning for pre-retirement goals as well. Overall, we’ve noticed these generations are pretty conservative, good savers, and don’t carry a lot of credit card debt but may have a significant amount of student loan debt.

What have you found to be the best way to connect with generations X and Y?

Our practice is very much values-based so regardless of the age of the client, we connect by what is important to them, which creates a strong bond. We take a comprehensive approach to financial preparation, which is what we want our conversations to really focus on. I’m part of Generation Y so I’m connecting with my peers. I try to put myself in their shoes—how would I like to be approached, how would I like to interact? Additionally, one of the things we highlighted on the Panel was the necessity of using technology in our practices. The use of technology makes the relationship with Gen X/Gen Y clients easier because with those generations, technology is not a bonus—it’s a requirement. That’s not to say the in-person or personal connection is replaced—it’s certainly not—it’s really a hybrid model. We use technology to make the quantitative data exchange really easy and efficient, in conjunction with our in-person or web meetings.

With your existing clients, how do you approach the topic of developing relationships with their children or other family members?

In our practice, we have pretty close personal relationships with our clients. We are often discussing and helping our clients prepare for life transitions. Often our clients’ life events involve the next generation—for example, a child’s wedding, a new grandchild, etc. As a service to our clients, we offer consultations with their children to help them with the financial changes associated with that life transition. We also engage the next generation when working on estate planning with our clients. We help our clients understand what kind of decisions they’ll be asked to make when meeting with an estate planning attorney. We talk through the roles of personal representative, power of attorney, etc. Often it’s a child who will fill these roles in their estate plan. If our clients are comfortable with it, we invite that key family member to begin joining us at their Annual Review meeting. This ensures that the client’s family member is not meeting us for the first time in the event of their parents’ death. It also helps them better understand the philosophies and strategies that their parents have embraced in their comprehensive financial portfolio all these years.

What do you believe the biggest contributor is to the majority of the next generation switching financial advisors? Why is the vast majority of advisors not actively engaging with family members of current clients?

I think often times if you have a sole practitioner practice, you’re going to connect best with your own demographic. In our practice, we have the advantage of Paul Leighton’s wisdom, experience and ability to connect with baby boomers really well, while I may be more technologically savvy and able to connect with younger generations. A team approach may appeal to a broader audience. For the most part, the business models in our industry are focused on assets under management, yet the segment of the population that is Generations X and Y often times don’t have a lot of assets to manage. We have to create a business model that makes the relationship with that second generation profitable, even though it’s likely not going to be through asset management. For our practice, that means charging a financial planning fee and creating a process that’s more accommodating to and fits the needs of Gen X or Gen Y clients.

How should advisors approach Generations X and Y differently from previous generations to gain their trust and maintain their assets?

It’s important to have the services that appeal to that generation’s needs—they have a host of other questions that financial planners need to be able to provide value and insight to. When we’re working with Gen X/Gen Y clients, we approach it as more of a collaborative process. Rather than just letting them run with a recommendation, we focus on giving them options and evaluating them together to find what makes the most sense for them. It’s more of a coaching approach—we weigh out the pros and cons of each option, rather than making a decision for them and expecting them to go implement it.

*Financial Advisors do not provide tax, mortgage, real estate or legal advice. You should always consult a tax or legal professional for advice regarding your specific tax and/or legal situation. North Star Resource Group and its affiliate(s) CRI Securities, LLC are independently owned and operated, and offers its own suite of products and services entirely independent of Securian.

Certain individuals associated with North Star Resource Group are registered with and offer securities and investment advisory services through Securian Financial Services, Inc. ("Securian") and CRI Securities, LLC, registered broker-dealers and investment advisors, member FINRA/SIPC. Individuals registered with Securian and CRI Securities, LLC are authorized to offer only those securities and investment advisory services that have been specifically approved by Securian and CRI Securities, LLC. Additional information about individuals registered with FINRA can be found on FINRA's BrokerCheck. For information about which individuals associated with North Star Resource Group are registered with Securian and CRI Securities, LLC, as well as information about which securities and investment advisory services such individuals are authorized to offer on Securian and CRI Securities, LLC's behalf, please contact Securian at 1-800-820-4205.

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